<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d)
of Securities Exchange Act of 1934
Commission File
For the fiscal year ended December 31, 1996 Number 33-42663
WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP
(Exact name of small business issuer as
specified in its charter)
Maryland 04-3129840
(State of organization) (IRS Employer Identification No.)
One International Place, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (617) 330-8600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
Registrant's revenues for its most recent fiscal year were $5,198,000
Cover Page Continued
on Next Page
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Cover page 2 of 2
No market exists for the limited partnership interests of the Registrant, and,
therefore, no aggregate market value can be computed.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format: Yes ___ No X
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PART I
Item 1. Description of Business.
Development
Winthrop Apartment Investors Limited Partnership (the "Registrant") was
organized under the Maryland Revised Uniform Limited Partnership Act (the "Act")
for the purpose of making equity investments in existing, income producing
residential apartment properties. The Registrant was formed pursuant to a
Certificate of Limited Partnership filed on September 5, 1991 with the Maryland
State Department of Assessments and Taxation. On April 30, 1992, the Registrant
executed an Amended and Restated Limited Partnership Agreement. The general
partner of the Registrant is WAI Associates Limited Partnership, a Texas limited
partnership ("WAI" or the "General Partner"). (See "Change in Control")
The Registrant was initially capitalized on or about September 5, 1991
with $1,000, representing a cash contribution to the Registrant from the General
Partner of $990 and from WFC Realty Co., Inc., the Initial Limited Partner of
the Registrant of $10.
In January 1992, the Registrant filed a Registration Statement on Form
S-11 with the Securities and Exchange Commission with respect to a public
offering of 250 units of limited partnership interest ("Units") at a purchase
price of $100,000 per Unit. The Registration Statement was declared effective on
January 31, 1992. The final admission of Limited Partners into the Registrant
occurred on December 31, 1992, at which time subscriptions for 250 Units,
representing capital contributions from Limited Partners of $24,700,000 (due to
a $300,000 reduction in selling commissions paid by one investor of 37.5 units),
had been accepted. Capital contributions, net of selling commissions, sales and
registration costs, were utilized to purchase investments in properties and to
make temporary short-term investments.
The current business of the Registrant is owning and operating its
existing, income producing residential apartment properties.
3
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Of the $24,700,000 in equity raised in the Registrant's offering,
$167,481 was allocated to organizational costs, $582,519 was allocated to
syndication costs, $1,700,000 was paid as selling commissions, leaving
$22,250,000 available for property acquisition. Direct property investment of
$17,330,000, closing costs of $90,844, acquisition fees of $1,760,000 and the
establishment of capital improvement reserves totaling $1,500,000 left a
contingency reserve and working capital fund of $1,569,156. The direct property
investment was in four residential apartment properties: Webb Bridge Crossing,
Chesapeake Apartments (formerly called Lost Mill), Covington Creek Apartments
and Northside Circle Apartments. All four of the properties were acquired by the
Registrant directly. At the time of the offering, two of the properties (Webb
Bridge Crossing and Chesapeake Apartments) had been acquired by the Registrant.
The two other properties were acquired subsequent to the initial offering. See
"Item 2, Description of Properties."
Employees
The Registrant does not have any employees. Services are performed for
the Registrant by the General Partner and agents retained by it.
Management services are performed for the Registrant at its properties
by on-site personnel all of whom are employees of Winthrop Management, an
affiliate of the General Partner, which directly manages the Registrant's
properties. All payroll and associated expenses of such on-site personnel are
fully reimbursed by the Registrant to Winthrop Management. Pursuant to a
management agreement, Winthrop Management provides certain property management
services to the Registrant in addition to providing on-site management. Winthrop
Management is a Massachusetts general partnership whose managing general partner
is First Winthrop, the parent of the general partner of WAI.
Competition
The real estate business is highly competitive and the Registrant's
properties have active competition from similar properties in the vicinity
including, in certain instances, properties owned by affiliates of the
Registrant. Furthermore, various limited partnerships controlled by affiliates
of the General Partner are also engaged in business which may be competitive
with the Registrant. The Registrant is also
4
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competing for potential buyers with respect to the ultimate sale of its
properties. See "Item 6, Management's Discussion and Analysis or Plan of
Operation."
Partnership Agreement Amendment
In August 1995, the General Partner amended Section 11.13 of the
Registrant's partnership agreement to clarify and remove certain ambiguities
pertaining to the requirements for calling and voting at a meeting of limited
partners, or taking action by written consent of partners in lieu thereof. Such
requirements include, among other matters, that any action by written consent
may be initiated only by the General Partner or by one or more Limited Partners
holding not less than 10% of the outstanding Units.
Change in Control
The general partner of the Registrant was, until January 1996, Two
Winthrop Limited Partnership ("Two Winthrop"). The general partner of Two
Winthrop is Nine Winthrop Properties, Inc., a Maryland corporation ("Nine
Winthrop") and the sole limited partner of Two Winthrop is Winthrop Financial
Associates, A Limited Partnership ("WFA"). Nine Winthrop is a wholly-owned
subsidiary of First Winthrop Corporation ("First Winthrop"), which in turn is a
wholly-owned subsidiary of WFA. The general partner of WFA is Linnaeus
Associates Limited Partnership, a Maryland limited partnership ("Linnaeus").
During December 1995, the Limited Partners of the Registrant consented
to the transfer by Two Winthrop of its general partner interest to WAI in
connection with the January 1996 mortgage financing (See "Item 2, Description of
Properties"). WAI is a Texas limited partnership whose sole general partner is
WAI Properties, Inc., a Texas corporation, a wholly owned subsidiary of First
Winthrop. The sole limited partner of WAI is WFA.
Until December 22, 1994, Arthur J. Halleran, Jr. was the sole general
partner of Linnaeus. On December 22, 1994, pursuant to an Investment
Agreement entered into among Nomura Asset Capital Corporation ("NACC"), Mr.
Halleran and certain other individuals who comprised the senior management
of WFA, the general partnership interest in Linnaeus was transferred to W.L.
Realty, L.P. ("W.L. Realty"). W.L. Realty is a Delaware limited
partnership, the general partner of which was, until July 18,
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1995, A.I. Realty Company, LLC ("Realtyco"). The equity securities of Realtyco
were held by certain employees of NACC.
On July 18, 1995 Londonderry Acquisition II Limited Partnership, a
Delaware limited partnership ("Londonderry II"), an affiliate of Apollo Real
Estate Advisors, L.P. ("Apollo"), acquired, among other things, Realtyco's
general partner interest in W.L. Realty and a sixty four percent (64%) limited
partnership interest in W.L. Realty. WFA owns the remaining thirty-five (35%)
limited partnership interest.
As a result of the foregoing acquisitions, Londonderry II is the sole
general partner of W.L. Realty which is the sole general partner of Linnaeus,
which in turn is the sole general partner of WFA. As a result of the foregoing,
effective July 18, 1995, Londonderry II became the controlling entity of the Two
Winthrop. In connection with the transfer of control, the officers and directors
of WFA resigned and Londonderry II appointed new officers and directors. See
"Item 9, Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act."
Tender Offer
On March 4, 1997, LON-WAI Associates L.L.C. ("LON-WAI") commenced an
offer to purchase up to 113 units of limited partnership interests in the
Registrant (the "Offer"), which units represent approximately 45.2% of the total
outstanding units in the Registrant. The members or LON-WAI and the General
Partner are affiliates. As a result of this affiliation, the Registrant has
remained neutral as to the whether Unitholders should tender their units. The
Offer is scheduled to close, subject to extension, on March 31, 1997. If the
number of Unitholders who tender their units in the Offer cause the Partnership
to have less than 300 Unitholders at the beginning of any year, then the
Registrant's obligations to make periodic filings with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 will be suspended
as to that year. However, pursuant to the terms of the Agreement of Limited
Partnership of the Registrant, the Registrant will continue to furnish
Unitholders with annual audited financial statements and quarterly unaudited
financial statements.
6
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Item 2. Description of Properties.
The following tables set forth the location, acquisition date, number
of units and original purchase price for the Registrant's properties:
<TABLE>
<CAPTION>
Acquisition Acquisition
Property Name Location Date Units Cost
- ------------- -------- ---------- ----- -----------
<S> <C> <C> <C> <C>
Webb Bridge Crossing Alpharetta, GA 11/22/91 164 $ 4,725,000
Chesapeake (formerly Austin, TX 1/17/92 124 $ 1,855,000
Lost Mill)
Covington Creek Irving, TX 11/18/92 248 $ 6,300,000
Northside Circle Atlanta, GA 1/20/93 219 $ 4,450,000
--- -----------
TOTAL 755 $17,330,000
--- -----------
--- -----------
</TABLE>
The following table sets forth the average annual occupancy rate and
per unit average monthly rental rate at the Registrant's properties for the
years ended December 31, 1996 and 1995:
Average Rental Average Occupancy
Rate Rate
----------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
Webb Bridge Crossing $693 $650 87.5% 91.1%
Chesapeake $539 $504 93.0% 96.3%
Covington Creek $554 $536 95.0% 93.2%
Northside Circle $656 $623 87.0% 90.3%
The Registrant maintains property and liability insurance on the
properties, which the Registrant believes to be adequate.
On January 5, 1996, the Registrant closed a new first mortgage loan in
the amount of $16,000,000 secured by all of the properties. The loan amount was
allocated $2,080,000, $4,320,000, $5,120,000 and $4,480,000 to Chesapeake
Apartments, Covington Creek Apartments, Northside Circle Apartments and Webb
Crossing Apartments, respectively. The mortgage loan bears interest at an
initial rate of 7.27% (until the "Optional Prepayment Date", as defined herein),
requires monthly principal and interest payments of $109,365 and matures in
February 2026.
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The Registrant has the option to prepay the mortgage loan without
penalty on, or three months before, February 1, 2003 (the "Optional Prepayment
Date"). If the Registrant does not elect to prepay the loan, the interest rate
will be adjusted to the greater of 12.27% or a "Treasury Rate" (as defined in
the loan documents) plus 7.75 percentage points. The properties are cross
collateralized subject to a Defeasance Option (as defined under the loan
documents) which generally allows the prepayment and release of collateral if
the collateral is substituted with U.S. obligations which provide for like
payments due under the terms of the mortgage note. The note may be assumed,
subject to the lender's consent. The loan is non-recourse to the Registrant (and
totally non-recourse to the Limited Partners), subject to certain exceptions
such as fraud, waste or environmental matters. The Registrant was required to
fund approximately $278,000 in reserves at closing to complete certain required
capital improvements to the properties, and establish tax and insurance escrows.
The Registrant is also required to fund an ongoing replacement reserve escrow.
In connection with the closing, Two Winthrop was replaced as the Managing
General Partner of the Registrant with WAI Associates Limited Partnership. This
transfer was approved by a majority in interest of the Limited Partners pursuant
to a Consent Solicitation. The lender required the transfer of the general
partnership interest as a condition to making the loan, to assure that the
Registrant and its general partner are single purpose entities, formed solely
for the purpose of owning and operating the properties. A portion of the
proceeds from the financing were distributed to the Limited Partners (see "Item
5, Market for Registrant's Common Equity and Related Stockholder Matters").
Set forth below is a table showing the gross carrying value and
accumulated depreciation and federal tax basis of each of the Registrant's
properties as of December 31, 1996:
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
- -------- ----- ------------ ---- ------ ---------
Webb Bridge Crossing $5,020,229 $590,667 5-40 S/L $4,281,966
Chesapeake 2,406,918 515,630 3-40 S/L 1,732,805
Covington Creek 6,580,090 708,021 5-40 S/L 5,719,153
Northside Circle 4,851,481 490,079 3-40 S/L 4,279,201
8
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The following table sets forth the realty tax rate and realty taxes
paid for each Property in 1996:
Property Tax Rate Taxes Paid
- -------- -------- ----------
Webb Bridge Crossing 7.88/1,000 $ 93,492.28
Chesapeake 2.54/100 85,251.46
Covington Creek 2.62/100 206,544.37
Northside Circle 5.53/100 139,503.44
Item 3. Legal Proceedings.
Registrant is not a party, nor are any of its properties subject, to
any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
Except as disclosed below, no matter was submitted to a vote of
security holders during the period covered by this report.
In December 1995, a consent solicitation was forwarded to Limited
Partners to solicit their consent to the transfer of the general partnership
interest from Two Winthrop to WAI in connection with the January 1996 Property
Financing. See "Item 1, Description of Business - Change in Control" and "Item
2, Description of Properties."
9
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PART II
Item 5. Market for the Registrant's Common Stock and
Related Stockholders Matters.
The Registrant is a partnership and thus has no common stock. There is
no active market for the Units. Trading in the Units is sporadic and occurs
through private transactions. See Item 1, "Description of Business Tender Offer"
for information relating to the tender offer for Units made by an affiliate of
the Managing General Partner
As of March 15, 1997, there were approximately 346 holders of Units
holding 250 Units. If the number of Unitholders who tender their units in the
Offer cause the Registrant to have less than 300 Unitholders at the beginning of
any year, then the Registrant's obligations to make periodic filings with the
Securities and Exchange Commission under the Securities Exchange Act of 1934
will be suspended as to that year. However, pursuant to the terms of the
Agreement of Limited Partnership of the Registrant, the Registrant will continue
to furnish Unitholders with annual audited financial statements and quarterly
unaudited financial statements.
Distributions of $1,090,909 ($4,200 per Unit) and $1,174,242 ($4,500
per Unit) were made on May 12, 1995 and September 5, 1995, respectively,
representing cash from property operations and interest earned on the
Registrant's reserves for the second half of 1994 and the first half of 1995.
During the year ended December 31, 1996, the Registrant distributed $17,718,434
to the partners of which approximately $60,000 represented net proceeds
available for distribution from the January 1996 property financing, and the
balance was from cash from property operations and interest earned on the
Registrant's reserves. See "Item 6, Management's Discussion and Analysis or Plan
of Operation," for information relating to the Registrant's future
distributions.
10
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Item 6. Management's Discussion and Analysis or Plan of Operation.
Liquidity and Capital Resources
All of the Registrant's real estate properties are residential
properties with apartments leased to tenants subject to leases of up to one
year. The Registrant receives rental income from its apartments and is
responsible for operating expenses, administrative expenses, capital
improvements and debt service payments. The Registrant uses working capital
reserves provided from any undistributed cash flow from operations and financing
of properties as its primary sources of liquidity. For the year ended December
31, 1996, the Registrant distributed to the holders of limited partnership units
$70,030 per unit ($17,507,500 in total), of which approximately $60,000 per unit
represented net proceeds available for distribution from the January 1996
property financing (see "Item 7, Financial Statements - Note 4). The general
partner was entitled to receive $308,000 for the year ended December 31, 1996.
The general partner was underpaid $97,000 of the 1996 distributions which will
be adjusted for in 1997. Future distributions from operations will be reduced
due to the 1996 property financing which will require annual debt service
payments of approximately $1,300,000, until the anticipated optional prepayment
date of the loan in February 2003.
The level of liquidity based upon the Registrant's cash and cash
equivalents experienced a $2,235,000 decrease at December 31, 1996, as compared
to December 31, 1995. The decrease was due to $2,514,000 of net cash used in
financing activities and $437,000 of cash used in investing activities, which
was partially offset by $716,000 of net cash provided by operating activities.
Financing activities consisted of $16,000,000 of proceeds from the mortgage
financing, which was offset by $17,718,000 of distributions to partners,
$681,000 of deferred financing costs incurred in connection with the mortgage
financing and $115,000 of mortgage principal payments. Investing activities
consisted of $214,000 of improvements to real estate and $223,000 of replacement
reserve deposits required in connection with the mortgage financing. The decline
in net cash from operating activities during the year ended December 31, 1996,
as compared to 1995, was primarily the result of interest expense incurred on
the January 1996 financing. All other increases (decreases) in certain assets
and liabilities are the result of the timing of receipt and payment of various
operating activities.
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Working capital reserves are currently being invested in short term
money market funds. The General Partner believes that, if market conditions
remain relatively stable, cash flow from operations when combined with working
capital reserves, will be sufficient to fund required capital improvements and
debt service payments in 1996 and the foreseeable future. The Registrant has no
available lines of credit.
The markets in which the Registrant's properties are located (Atlanta,
Dallas and Austin) remain relatively stable. The Atlanta market is becoming more
competitive as a result of new apartment complexes that were completed in 1995.
Despite new construction activity, the Austin market continues to remain stable.
The Registrant spent $214,000 on capital improvements during the year ended
December 31, 1996. The Registrant does not have any significant capital
improvements planned for 1997. Other than cash and cash equivalents, the
Registrant has no other available sources of liquidity.
See "Item 1, Description of Business" for information relating to the
tender offer made by an affiliate of the General Partner for units of limited
partnership interest in the Registrant.
Results of Operations
Net income decreased by $1,401,000 for the year ended December 31,
1996, as compared to 1995, primarily due to the $1,187,000 of mortgage interest
expense incurred on the aforementioned property financing.
Rental revenues increased by $171,000 primarily due to an increase in
rental rates at all of the Registrant's properties which were partially offset
by a decrease in occupancy at the Registrant's Chesapeake, Northside Circle and
Webb Bridge Crossing properties. Other income increased by $24,000 primarily due
to an increase in corporate unit income at the Registrant's Webb Bridge Crossing
property. Interest income decreased by $145,000 due to a decrease in average
working capital reserves available for investment.
Expenses increased by $1,451,000 for the year ended December 31, 1996,
as compared to 1995, primarily due to mortgage interest expense of $1,187,000
incurred in connection with the January 1996
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financing, and increases in general and administrative expenses of $93,000,
amortization expense of $80,000 and depreciation expense of $60,000. General and
administrative expenses increased primarily due to an increase in professional
and other related costs. Amortization expense increased primarily due to the
additional amortization of the deferred legal and mortgage costs associated with
the January 1996 financing. Depreciation expense increased due to the effect of
fixed asset additions at all of the Registrant's properties. All other expenses
remained relatively constant.
13
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Item 7. Financial Statements
WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
INDEX
Independent Auditors' Reports............................................F-2
Financial Statements:
Balance Sheets as of December 31, 1996 and 1995.................F-4
Statements of Operations for the Years Ended
December 31, 1996 and 1995......................................F-5
Statements of Partners' Capital for
the Years Ended December 31, 1996 and 1995......................F-6
Statements of Cash Flows for the Years Ended
December 31, 1996 and 1995......................................F-7
Notes to Financial Statements...................................F-8
F - 1
<PAGE>
Independent Auditors' Report
To the Partners of
Winthrop Apartment Investors Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheet of Winthrop Apartment Investors
Limited Partnership (a Maryland limited partnership) as of December 31, 1996 and
the related statements of operations, partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Winthrop Apartment Investors
Limited Partnership, a Maryland limited partnership, as of December 31, 1996 and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/ Imowitz Koenig & Co., LLP
New York, New York
January 30, 1997
F - 2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Winthrop Apartment Investors Limited Partnership:
We have audited the accompanying balance sheets of Winthrop Apartment Investors
Limited Partnership (a Maryland limited partnership) as of December 31, 1995
and the related statements of operations, changes in partners' capital and cash
flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Winthrop Apartment Investors
Limited Partnership as of December 31, 1995, the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 2, 1996
F-3
<PAGE>
WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP
BALANCE SHEETS
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------
ASSETS 1996 1995
------------------- ---------------------
<S> <C> <C>
Real Estate, At Cost:
Land $ 3,666 $ 3,666
Buildings and improvements, net of accumulated
depreciation of $2,304 (1996) and $1,706 (1995) 12,889 13,273
------------------- ---------------------
16,555 16,939
Other Assets:
Cash and cash equivalents 1,220 3,455
Escrow deposits and replacement reserves 756 -
Other assets 417 306
Deferred costs, net of accumulated amortization
of $489 (1996) and $293 (1995) 2,284 1,799
------------------- ---------------------
Total Assets $ 21,232 $ 22,499
=================== =====================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage payable $ 15,885 $ -
Accounts payable and accrued expenses 458 381
Security deposits 127 125
------------------- ---------------------
Total Liabilities 16,470 506
------------------- ---------------------
Partners' capital:
Limited partners' capital; 250 units authorized,
issued and outstanding 5,062 22,013
General partner's deficit (300) (20)
------------------- ---------------------
Total Partners' Capital 4,762 21,993
------------------- ---------------------
Total Liabilities and Partners' Capital $ 21,232 $ 22,499
=================== =====================
</TABLE>
See notes to financial statements
F - 4
<PAGE>
WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------
1996 1995
--------------------- ---------------------
<S> <C> <C>
Income:
Rental $ 4,884 $ 4,713
Other 255 231
Interest 59 204
--------------------- ---------------------
Total Income 5,198 5,148
--------------------- ---------------------
Expenses:
Mortgage interest 1,187 -
Leasing 208 191
General and administrative 399 306
Management fees 254 243
Utilities 375 392
Repairs and maintenance 634 626
Painting and decorating 155 138
Insurance 175 180
Taxes 564 564
Amortization 162 82
Depreciation 598 538
--------------------- ---------------------
Total expenses 4,711 3,260
--------------------- ---------------------
Net income $ 487 $ 1,888
===================== =====================
Net income allocated to general partners $ 28 $ 75
===================== =====================
Net income allocated to limited partners $ 459 $ 1,813
===================== =====================
Net income per Unit of Limited Partnership Interest $ 1,836 $ 7,252
===================== =====================
Distributions per Unit of Limited Partnership Interest $ 69,640 $ 8,700
===================== =====================
</TABLE>
See notes to financial statements
F - 5
<PAGE>
WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1996 AND 1995
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Units of
Limited General Limited Total
Partnership Partner's Partners' Partners'
Interest Deficit Capital Capital
------------------ -------------------- ---------------------- -------------------
<S> <C> <C> <C> <C>
Balance - January 1, 1995 250 $ (5) $ 22,375 $ 22,370
Distributions - (90) (2,175) (2,265)
Net income - 75 1,813 1,888
------------------ -------------------- ---------------------- -------------------
Balance - December 31, 1995 250 (20) 22,013 21,993
Distributions - (308) (17,410) (17,718)
Net income - 28 459 487
------------------ -------------------- ---------------------- -------------------
Balance - December 31, 1996 250 $ (300) $ 5,062 $ 4,762
================== ==================== ====================== ===================
</TABLE>
See notes to financial statements.
F - 6
<PAGE>
WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------
1996 1995
--------------------- ---------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 487 $ 1,888
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 598 538
Amortization 196 82
Changes in assets and liabilities:
Increase in escrow deposits (533) -
Increase in other assets (111) (67)
Increase in accounts payable and accrued expenses 77 56
Increase (decrease) in security deposits
liability 2 (3)
--------------------- ---------------------
Net cash provided by operating activities 716 2,494
--------------------- ---------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate (214) (235)
Reserve for replacement deposits (223) -
--------------------- ---------------------
Cash (used in) investing activities (437) (235)
--------------------- ---------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage financings 16,000 -
Principal payments on mortgage (115) -
Deferred financing costs (681) (120)
Distributions (17,718) (2,265)
--------------------- ---------------------
Net cash (used in) financing activities (2,514) (2,385)
--------------------- ---------------------
Net (decrease) in cash and cash equivalents (2,235) (126)
Cash and Cash Equivalents, Beginning of Year $ 3,455 $ 3,581
--------------------- ---------------------
Cash and Cash Equivalents, End of Year $ 1,220 $ 3,455
===================== =====================
Supplemental Disclosure of Cash Flow Information -
Cash paid for interest $ 1,088 $ -
===================== =====================
</TABLE>
See notes to financial statements.
F - 7
<PAGE>
WINTHROP APARTMENT INVESTORS
LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Winthrop Apartment Investors Limited Partnership (the "Partnership") was
organized on September 5, 1991 under the laws of the State of Maryland for
the purpose of acquiring, renovating, operating and managing residential
apartment complexes. The Partnership's properties are located in Austin,
Texas (Chesapeake Apartments); Irving, Texas (Covington Creek Apartments);
Fulton County, Georgia (Webb Bridge Crossing Apartments); and Atlanta,
Georgia (Northside Circle Apartments).
The general partner of the Partnership is WAI Associates Limited
Partnership, a Texas limited Partnership ("WAI" or the "General Partner"),
whose sole general partner is WAI Properties, Inc., a Texas corporation and
a wholly owned subsidiary of First Winthrop Corporation ("First Winthrop").
The sole limited partner of WAI is Winthrop Financial Associates ("WFA").
First Winthrop is a wholly owned subsidiary of WFA. The general partner of
the Partnership was, until January 1996, Two Winthrop Limited Partnership
("Two Winthrop") an affiliate of WAI.
The Partnership was capitalized with $24,700,000 of contributions
representing 250 investor limited partnership units. The offering closed on
December 31, 1992. The general partner and affiliates contributed $1,000.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Accounting Change
On January 1, 1996, the Partnership adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which
requires impairment losses to be recognized for long-lived assets used in
operations when indicators of impairment are present and the undiscounted
cash flows are not sufficient to recover the asset's carrying amount. The
impairment loss is measured by comparing the fair value of the asset to its
carrying amount. The adoption of the SFAS has no effect on the
Partnership's financial statements.
Income Taxes
Taxable income or loss of the Partnership is reported in the income tax
returns of its partners. Accordingly, no provision for income taxes is made
in the financial statements of the Partnership.
Deferred Costs
Organization costs are amortized on the straight-line basis over five
years. Acquisition fees are amortized on the straight-line basis over 27.5
and 40 years. Deferred financing costs are amortized on the straight-line
basis over the life of the loan. Financing fees paid to the lender are
amortized as interest expense over the life of the loan.
Depreciation
The Partnership provides for depreciation of buildings and improvements on
the straight-line basis over their estimated useful lives of 40 years for
buildings and improvements and 3 to 15 years for personal property.
F - 8
<PAGE>
WINTHROP APARTMENT INVESTORS
LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
(Continued)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Concentration of Credit Risk
Principally all of the Partnership's cash and cash equivalents consist of a
mutual fund that invests in U.S treasury bills and repurchase agreements
with original maturity dates of three months or less.
Reclassification
Certain amounts from 1995 have been reclassified to conform to the 1996
presentation.
2. RELATED PARTY TRANSACTIONS
Winthrop Management, an affiliate of the managing general partner, is paid
an annual property management fee equal to 5% of gross receipts from all
Partnership properties managed by Winthrop Management. Such fees aggregated
$254,000 and $243,000 in 1996 and 1995, respectively. Winthrop Management
was also paid an $80,000 fee relating to the mortgage financing (see Note
4).
3. DEFERRED COSTS
The following is a summary of the deferred costs:
December 31,
--------------------------------------
1996 1995
---- ----
Organization costs $ 167,000 $ 167,000
Acquisition costs 1,805,000 1,805,000
Financing costs 801,000 120,000
---------------- ---------------
2,773,000 2,092,000
Less-Accumulated amortization 489,000 293,000
---------------- --------------
$ 2,284,000 $ 1,799,000
================ ===============
F - 9
<PAGE>
WINTHROP APARTMENT INVESTORS
LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
(Continued)
4. MORTGAGE PAYABLE
On January 5, 1996, the Partnership obtained a mortgage loan in the amount
of $16,000,000 secured by all of the properties. The loan amount was
allocated $2,080,000, $4,320,000, $5,120,000 and $4,480,000 to Chesapeake
Apartments, Covington Creek Apartments, Northside Circle Apartments and
Webb Crossing Apartments, respectively. The mortgage loan bears interest at
an initial rate of 7.27% (until the "Optional Prepayment Date", as
defined), requires monthly principal and interest payments of approximately
$109,000 and matures in February 2026. The Partnership has the option to
prepay the mortgage loan without penalty on, or three months before,
February 1, 2003 (the "Optional Prepayment Date"). If the Partnership does
not elect to prepay the loan, the interest rate will be adjusted to the
greater of 12.27% or a "Treasury Rate" (as defined) plus 7.75 percentage
points. The Partnership was required to fund approximately $278,000 in
reserves at closing to complete certain required capital improvements to
the properties, and establish tax and insurance escrows. The Partnership is
also required to fund an ongoing replacement reserve. In connection with
the closing, Two Winthrop was replaced as the General Partner of the
Partnership with WAI Associates Limited Partnership. The lender required
the transfer of the general partnership interest as a condition to making
the loan to assure that the Partnership and its general partner are single
purpose entities, formed solely for the purpose of owning and operating the
properties.
As of December 31, 1996 principal payments are required as follows:
1997 $ 163,000
1998 175,000
1999 188,000
2000 202,000
2001 218,000
Thereafter 14,939,000
----------------
Total $ 15,885,000
================
5. ALLOCATION OF INCOME, LOSSES AND DISTRIBUTIONS
In accordance with the partnership agreement, cash flow distributions shall
be allocated 99% to the limited partners and 1% to the general partner,
until the limited partners have received a 6% noncumulative, noncompounded
annual rate of return on their net invested capital, at which point the
remainder shall be distributed 90% to the limited partners and 10% to the
general partner. Distributions of cash other than cash flow shall be
distributed in accordance with the partnership agreement with no less than
1% allocated to the general partner. Income shall be allocated to the
partners in proportion to the cash available for distribution to the
partners; losses shall be allocated 90% to the limited partners and 10% to
the general partner. If there is no such cash available for distribution,
income will be allocated 90% to the limited partners and 10% to the
general partner.
F - 10
<PAGE>
WINTHROP APARTMENT INVESTORS
LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
(Continued)
6. DISTRIBUTIONS
The Partnership distributed $17,410,000 ($69,640 per unit) to the Limited
Partners during the year ended December 31, 1996. The General Partner was
entitled to $308,000 for the year ended December 31, 1996. The General
Partner was underpaid $97,000 of the 1996 distributions which will be
adjusted for in 1997. The distributions included approximately $14,923,000
of proceeds from a January 1996 mortgage financing (see Note 4).
For the year ended December 31, 1995, distributions of $2,175,000 ($8,700
per unit) and $90,000 were paid to the limited and General Partners,
respectively.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents of $1,220,000 approximates
fair value due to the short term nature of such instruments. The carrying
amount of the Partnership's mortgage note of $15,885,000 approximates its
fair value based on the recent financing of such note.
8. TAXABLE INCOME
The Partnership's taxable income for 1996 and 1995 differs from that for
financial reporting purposes as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Net income for financial reporting purposes $487,000 $1,888,000
Accelerated depreciation on real and personal property (78,000) (147,000)
Assets with estimated useful lives of greater than
one year for tax purposes - 95,000
--------- ----------
Taxable income $409,000 $1,836,000
========== ==========
</TABLE>
F - 11
<PAGE>
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
Effective September 19, 1996, the Registrant dismissed its prior
Independent Auditors, Arthur Andersen LLP ("Arthur Andersen") and retained as
its new Independent Auditors, Imowitz Koenig & Co., LLP ("Imowitz Koenig").
Arthur Andersen's Independent Auditors' Report on the Registrant's financial
statements for calendar year ended December 31, 1995, did not contain an adverse
opinion or a disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope or accounting principles. The decision to change
Independent Auditors was approved by the Registrant's managing general partner's
directors. During calendar year ended 1995 and through September 19, 1996, there
were no disagreements between the Registrant and Arthur Andersen on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope of procedure which disagreements if not resolved to the
satisfaction of Arthur Andersen, would have caused it to make reference to the
subject matter of the disagreements in connection with its reports.
Effective September 19, 1996, the Registrant engaged Imowitz Koenig as
its Independent Auditors. The Registrant did not consult Imowitz Koenig
regarding any of the matters or events set forth in Item 304(a)(2) of Regulation
S-B prior to September 19, 1996.
14
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
Neither the Registrant nor its general partner, WAI Associates Limited
Partnership ("WAI" of the "General Partner") has any officers or directors. WAI
Properties, Inc. manages and controls substantially all of WAI's affairs and has
general responsibility and ultimate authority in all matters affecting its
business. As of March 1, 1997, the names of the directors and executive officers
of WAI Properties, Inc. and the position held by each of them are as follows:
Has Served as
Position Held with a Director or
Name WAI Properties, Inc. Officer Since
- ---- -------------------- -------------
Michael L. Ashner Chief Executive Officer 1-96
and Director
Richard J. McCready President and
Chief Operating Officer 7-95
Jeffrey Furber Executive Vice President 7-95
and Secretary
Edward Williams Chief Financial Officer 4-96
Vice President and
Treasurer
Peter Braverman Senior Vice President 1-96
Michael L. Ashner, age 45, has been the Chief Executive Officer of
Winthrop Financial Associates, A Limited Partnership ("WFA") since January 15,
1996. From June 1994 until January 1996, Mr. Ashner was a Director, President
and Co-chairman of National Property Investors, Inc., a real estate investment
company ("NPI"). Mr. Ashner was also a Director and executive officer of NPI
Property Management Corporation ("NPI Management") from April 1984 until January
1996. In addition, since 1981 Mr. Ashner has been President of Exeter Capital
Corporation, a firm which has organized and administered real estate limited
partnerships.
15
<PAGE>
Richard J. McCready, age 38, is the President and Chief Operating
Officer of WFA and its subsidiaries. Mr. McCready previously served
as a Managing Director, Vice President and Clerk of WFA and a
Director, Vice President and Clerk of the Managing General Partner
and all other subsidiaries of WFA. Mr. McCready joined the Winthrop
organization in 1990.
Jeffrey Furber, age 37, has been the Executive Vice President of WFA
and the President of Winthrop Management since January 1996. Mr. Furber served
as a Managing Director of WFA from January 1991 to December 1995 and as a Vice
President from June 1984 until December 1990.
Edward V. Williams, age 56, has been the Chief Financial Officer of WFA
since April 1996. From June 1991 through March 1996, Mr. Williams was Controller
of NPI and NPI Management. Prior to 1991, Mr. Williams held other real estate
related positions including Treasurer of Johnstown American Companies and Senior
Manager at Price Waterhouse.
Peter Braverman, age 45, has been a Senior Vice President of WFA since
January 1996. From June 1995 until January 1996, Mr. Braverman was a Vice
President of NPI and NPI Management. From June 1991 until March 1994, Mr.
Braverman was President of the Braverman Group, a firm specializing in
management consulting for the real estate and construction industries. From 1988
to 1991, Mr. Braverman was a Vice President and Assistant Secretary of Fischbach
Corporation, a publicly traded, international real estate and construction firm.
One or more of the above persons are also directors or officers of a
general partner (or general partner of a general partner) of the following
limited partnerships which either have a class of securities registered pursuant
to Section 12(g) of the Securities and Exchange Act of 1934, or are subject to
the reporting requirements of Section 15(d) of such Act: Winthrop Partners 79
Limited Partnership; Winthrop Partners 80 Limited Partnership; Winthrop Partners
81 Limited Partnership; Winthrop Partners 93 Limited Partnership; Winthrop
Residential Associates I, A Limited Partnership; Winthrop Residential Associates
II, A Limited Partnership; Winthrop Residential Associates III, A Limited
Partnership; 1626 New York Associates Limited Partnership; 1999 Broadway
Associates Limited Partnership; Indian River Citrus Investors Limited
Partnership; Nantucket Island Associates Limited Partnership; One Financial
Place Limited
16
<PAGE>
Partnership; Presidential Associates I Limited Partnership; Riverside Park
Associates Limited Partnership; Springhill Lake Investors Limited Partnership;
Twelve AMH Associates Limited Partnership; Winthrop California Investors Limited
Partnership; Winthrop Growth Investors I Limited Partnership; Winthrop Interim
Partners I, A Limited Partnership; Southeastern Income Properties Limited
Partnership; Southeastern Income Properties II Limited Partnership; and Winthrop
Miami Associates Limited Partnership.
Except as indicated above, neither the Registrant nor the General
Partner has any significant employees within the meaning of Item 401(b) of
Regulation S-B. There are no family relationships among the officers and
directors of WAI Properties, Inc.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Registrant under Rule 16a-3(e) during the Registrant's most
recent fiscal year and Forms 5 and amendments thereto furnished to the
Registrant with respect to its most recent fiscal year, the Registrant is not
aware of any director, officer or beneficial owner of more than ten percent of
the units of limited partnership interest in the Registrant that failed to file
on a timely basis, as disclosed in the above Forms, reports required by section
16(a) of the Exchange Act during the most recent fiscal year or prior fiscal
years.
Item 10. Executive Compensation.
The Registrant is not required to and did not pay any compensation to
the officers or directors of the general partner of the General Partner. The
general partner of the General Partner does not presently pay any compensation
to any of its officers and directors (See "Item 12, Certain Relationships and
Related Transactions").
Item 11. Security Ownership of Certain Beneficial Owners
and Management.
The General Partner owns all the outstanding general partnership
interests. The only person or group that is known by the Registrant to be the
beneficial owner of more than 5% of the outstanding Units as of December 31,
1996, is Norwest Bank Minnesota, N.A., Trustee for Norwest Corporation Pension
Plan, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota
17
<PAGE>
55479, which holds 37.5 units, representing 15% of the Units
outstanding. Norwest Bank Minnesota, N.A. and Norwest Corporation
Pension Plan are entities which are unaffiliated with the General
Partner and its affiliates. Under the Registrant's partnership
agreement, the voting rights of the Limited Partners are limited and in
some circumstances, are subject to the prior receipt of certain opinions
of counsel or judicial decisions.
LON-WAI Associates L.L.C. ("LON-WAI"), an entity affiliated with the
General Partner, which presently owns two limited partnership units, has
commenced a tender offer to acquire up to 113 limited partnership units in the
Registrant or approximately 45.2% of the outstanding Units.
None of the officers, directors or the general partner of the General
Partner own any Units.
There exists no arrangement known to the Registrant the operation of
which may at a subsequent date result in a change in control of the Registrant.
Item 12. Certain Relationships and Related Transactions.
Winthrop Management, an affiliate of the General Partner, is paid an
annual property management fee equal to 5% of gross receipts from all the
Registrant's properties managed by Winthrop Management. Winthrop Management was
paid $254,000 and $243,000 for the years ended December 31, 1996 and 1995,
respectively for such services. In addition, the Registrant paid to Winthrop
Management a $80,000 fee in connection with the financing of the Registrant's
properties in January 1996.
For the years ended December 31, 1996 and 1995, the General Partner
received distributions from the Registrant of $308,000 and $90,000,
respectively. The distribution paid to the General Partner in 1996 was
approximately $97,000 less than the distribution to which the General Partner
was entitled pursuant to the terms of the Registrant's Agreement of Limited
Partnership. Accordingly, adjustment will be made to the 1997 distributions to
account for this underpayment.
18
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits:
The Exhibits listed on the accompanying Index to Exhibits are
filed as part of this Annual Report and incorporated in this
Annual Report as set forth in said Index.
(b) Reports on Form 8-K - None
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP
By: WAI Associates Limited Partnership,
its General Partner
By: WAI Properties, Inc.,
its General Partner
By: /s/ Michael L. Ashner
---------------------
Michael Ashner
Chief Executive Officer
Date: March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature/Name Title Date
- -------------- ----- ----
/s/ Michael Ashner Chief Executive March 28, 1997
- ------------------
Michael Ashner Officer and Director
/s/ Edward Williams Chief Financial Officer March 28, 1997
- -------------------
Edward Williams
20
<PAGE>
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Document Page
- ------ -------- ----
<S> <C> <C>
3,4(a) Agreement of Limited Partnership of the Registrant, dated as of September 4, 1991 (1)
3,4(b) Amended and Restated Limited Partnership Agreement of the Registrant, dated as (1)
of April 30, 1992
3,4(c) Amendment to Amended and Restated Limited Partnership Agreement of Winthrop (2)
Apartment Investors Limited Partnership dated August 23, 1995
3,4(d) Consent Solicitation dated December 1995 (3)
10(a) Management Agreement between the Registrant and Winthrop Management for (4)
management of Webb Bridge Crossing, dated as of November 27, 1991
10(b) Management Agreement between the Registrant and Winthrop Management for (4)
management of Covington Creek Apartments
10(c) Management Agreement between the Registrant and Winthrop Management for (4)
management of Lost Mill Apartments (now called Chesapeake Apartments), dated as
of February 4, 1992
10(d) Management Agreement between the Registrant and Winthrop Management for (4)
management of Northside Circle Apartments, dated January 20, 1993
10(e) Loan Agreement dated as of January 5, 1996 between the Registrant, as Borrower, (5)
and Nomura Asset Capital Corporation, as Lender
10(f) Promissory Note dated as of January 5, 1996 issued by the Registrant to Nomura (5)
Asset Capital Corporation
21
<PAGE>
10(g) Form of Deed of Trust, Assignment of Leases and Rents and Security Agreement (5)
between Registrant and Nomura Asset Capital Corporation
16 Letter dated September 19, 1996 from Arthur Andersen LLP. (6)
27 Financial Data Schedule
</TABLE>
(1) Incorporated by reference to the Registrant's Annual Report on Form 10-K
dated March 31, 1994, for the year ended December 31, 1993
(2) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated August 23, 1995
(3) Incorporated by reference to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995
(4) Incorporated by reference to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992.
(5) Incorporated by reference to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995
(6) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated September 19, 1996
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Winthrop
Apartment Investors Limited Partnership and is qualified in its entirety by
reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,220,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 18,859,000
<DEPRECIATION> (2,304,000)
<TOTAL-ASSETS> 21,232,000
<CURRENT-LIABILITIES> 0
<BONDS> 15,885,000
<COMMON> 0
0
0
<OTHER-SE> 7,462,000
<TOTAL-LIABILITY-AND-EQUITY> 21,232,000
<SALES> 0
<TOTAL-REVENUES> 5,139,000
<CGS> 0
<TOTAL-COSTS> 3,125,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,187,000
<INCOME-PRETAX> 487,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 487,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 487,000
<EPS-PRIMARY> 1,836.00
<EPS-DILUTED> 1,836.00
</TABLE>
